NEWS ANALYSIS : Mexico Unease Rises With Rejection : Negotiations: Chiapas rebels’ refusal to accept government peace plan fuels sense of national instability. The case of a murdered presidential candidate is far from resolved, and drug-related violence continues.

Just two months before the Mexican presidential election, the Indian rebels’ weekend rejection of the government’s peace offer has added another element of uncertainty to an increasingly unstable atmosphere here, analysts said Monday.

Besides failing to resolve the uprising in the southern state of Chiapas, the government appears further than ever from concluding its investigation into the assassination of ruling party presidential candidate Luis Donaldo Colosio. Officials have been unable to halt narcotics-related violence.

“This is one more element of uncertainty, violence and difficulty that piles onto what there already is,” political analyst Jorge Castaneda said. “That can’t be good.”

Castaneda recently hosted a controversial luncheon for 40 political and intellectual leaders here to discuss ways to avert the mounting threat of general instability and possible violence in connection with Mexico’s Aug. 21 federal elections. His efforts, and others, are occurring even as a sense of unease is growing that the government cannot adequately deal with the nation’s problems.

Over the weekend, a car bomb exploded outside a major hotel in Guadalajara--Mexico’s second-largest city and narcotics center--where a family linked to drug dealers celebrated a teen-ager’s birthday with a party for 200 guests. At the party, police found place cards with names of individuals related to convicted drug lord Rafael Caro Quintero.

Police blamed the bombing, which killed at least two people, on a rival drug gang, making it the latest in a series of narcotics-related incidents across the country.

Meanwhile, Diana Laura Riojas, Colosio’s widow, last week appointed her own lawyer to participate in the trial of her husband’s alleged assassin.

This move has been widely perceived to indicate that she lacks confidence in the floundering investigation of her husband’s killing.

Victims’ families have standing in Mexican courts equal to that of the prosecutor and defendant.

In a letter published in the independent magazine Proceso, Riojas asked the special prosecutor to consider a third theory about her husband’s murder: that he was killed neither by a conspiracy, as authorities had originally said, nor by a lone gunman, as the chief investigator now contends.

She suggested that a mastermind may have used Mario Aburto Martinez, now jailed and awaiting trial on charges he killed Colosio, as a weapon against her husband.

Mexicans have widely rejected the theory that Aburto, a 23-year-old factory worker, acted alone when he killed Colosio after a campaign rally in a working-class Tijuana neighborhood.

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As for the Chiapas situation, some observers believe the rebels have recognized that Mexicans increasingly distrust the government. The rebels, accordingly, have decided that approving official peace proposals would make them appear to be taking the side of a failing administration.

“It would be like offering political backing to a regime that is in its weakest moment,” political analyst Sergio Sarmiento wrote in El Financiero business newspaper. “They are sending a message to the government of (President) Carlos Salinas (de Gortari) that they will not accept a peace proposal that could end the regime’s political worries” and they now have something to hang over the president and his party’s handpicked candidate.

Not surprisingly, Ernesto Zedillo--now the candidate of the party that has ruled Mexico for 65 years--reacted angrily to the rebels’ rejection of the peace proposal. “This has been a great disillusionment,” he told backers in Villahermosa, a city near the Chiapas border. “We were sure that the negotiations had been a success. . . .”

Marcela Lombardo, the presidential candidate of the tiny, leftist Popular Socialist Party, called the rebels’ action an attempt to cloud the election.

But Zedillo’s nearest rival--Diego Fernandez de Cevallos of the right-center National Action Party--said he expected the “confusing” plan would be rejected.